Bad weather shrinks construction

Nine months of growth in the construction sector came to an
end in December, as the bad winter weather caused the sector to contract.

The Markit/CIPS Construction Purchasing Managers’ Index (PMI)
posted 49.1 in the last month of 2010, falling from 51.8 in November. A score
of 50 indicates no change.

New order growth accelerated slightly, however, and many firms
said poor weather conditions were reducing activity.

Sarah Ledger, economist at Markit and PMI author, said: “A modest rise in new
business suggested that particularly poor weather had acted to reduce activity.
Nonetheless, growth has been subdued in recent months, largely due to
contractions in residential construction, signalling that business conditions
in the sector were not conducive to a large overall expansion in activity.”

While confidence about future activity rose in December, this
was at a slower pace than the previous month, he said.

"A major worry is the situation in the housing market,
which suffered its steepest decline in activity for 20 months,” Noble said.

UK construction
companies reported a marginal reduction of purchasing activity in December, the
PMI found. This was the third consecutive decrease in input buying, although
the least severe of that period. Suppliers’ lead times lengthened markedly as
unseasonally poor weather and low stocks at vendors delayed deliveries, the
report said.